Are Shorter Work Hours Good for the Environment? A Comparison of U.S. and European Energy Consumption

It is well known that Europe lags behind the United States in terms of GDP per capita. However, it is less well known that European workers in a number of countries are nearly as productive, and in some cases more productive, than their American counterparts. As seen in Table 1, GDP per hour worked in Germany (including the former East Germany) was $30.73 compared to $33.77 in the United States. France was even more productive than the United States, with a GDP per hour worked of $37.01.

TABLE 1: Productivity and GDP per CapitaSource: Groningen Growth and Development Data Centre and the Conference Board, Total Economy Database

So why do other advanced countries lag behind the United States in GDP per capita? They simply work fewer hours. In small part, this is due to EU-15 countries having lower employment-to-population rates than in the United States (approximately 64.4 percent of all people aged 15 to 64 compared to 71.2 percent in the United States). In large measure, however, the reduced hours are conditional on employment. Employed Americans work 16 percent more hours than their EU-15 counterparts.

Mandatory paid vacations and shorter workweeks mean that workers in other countries have gotten some of their productivity advances in the form of reduced hours. Workers in the United States work more hours of every year than do workers in almost every other developed country. In general, the higher the GDP per hour worked, the fewer the average work hours. Table 2 shows the average annual hours worked per person employed for various countries in 2001. That year, American workers spent an average of 1,817 hours on the job, compared to an average of 1,650 hours in all the other countries listed. Workers in the EU-15 worked even fewer hours at only 1,562 — some 14 percent less time on the job compared to those in the United States. Assuming an average of 35 hours per week, this difference corresponds to more than seven weeks of additional time off (in both leave and shorter workweeks) per worker each year.

As can been seen in Table 2, not only do U.S. employees work more hours than in almost all other high-income countries, but they work an unusually high number of hours for the country’s level of productivity. In other words, the only countries that come close to or exceed the United States’ annual hours worked tend to have lower productivity.

Variation in Energy Efficiency among Countries

As can be seen in Figure 1, the least energy efficient countries — as measured by energy consumed per dollar of GDP — are generally those in colder climates.

FIGURE 1: Energy Consumed per Dollar of GDPSource: Groningen Growth and Development Data Centre and the Conference Board, Total Economy Database and World Bank, World Development Indicators 2005.

Ireland, Italy, and Switzerland appear to be energy efficient, while Iceland, Canada, and Finland, are energy inefficient.1

Longer Work Hours Means More Energy Use

Countries where people work fewer hours use much less energy than the United States. If we assume constant energy efficiency (energy per unit of GDP) and a constant productivity (GDP per hour of work), then energy use per hour of work must be constant. Table 4 shows that, under this simplifying assumption, if workers in “Old Europe” had worked as many hours in 2003 as had workers in the United States, the EU-15 would have consumed 18 percent more energy.2

Table 3 represents a simplified estimation of how energy consumption per country would increase if work hours increased. However, the relationship between energy consumption and work hours could be more complicated. For example, workers (or families) with less leisure time may dry their laundry by machine rather than drying it on a clothesline. They may not take the time to walk or bicycle to work, but rather drive. These behavioral changes in response to increased work hours would cause energy efficiency to decline as work hours increased. On the other hand, they may have their clothes professionally laundered, or take a cab. While these decisions would increase energy consumption, they would also increase hours worked in the economy, so the effect on this measure of energy efficiency is indeterminate. Finally, they may pay professionals to paint their homes rather than do it themselves. While this would consume the same amount of much energy, it would increase hours worked, thereby increasing this measure of energy efficiency. Of course, as people leave their homes to work, energy savings at home might balance the extra energy consumed at work. Any net effect of work hours on energy consumption is not easy to predict.

We therefore try to estimate this relationship between energy efficiency (as measured per hours worked) and an increase in hours. The appendix explains how this is done. Based on this estimation, we can delineate a range of possible relationships between an increase in work hours and energy consumed.

Table 4 takes the low estimate of this range: that every one percent increase in work hours per worker results in a 0.32 percent increase in energy consumed per work hour. In other words, energy use per work hour increases as work hours increase, but here we are using the lowest (most conservative) estimate of the amount by which it increases.4

Collectively, these three scenarios cover a range of possible energy responses to changes in work hours. If, in 2003, other developed country workers worked as many hours as Americans, by these estimates they would have consumed anywhere from 12 to 41 percent more energy. Similarly, if Americans traded work for leisure, they could reduce their energy needs by 9 to 26 percent.

Conclusion

If Americans chose to take advantage of their high level of productivity by shortening the workweek or taking longer vacations rather than producing more, there would follow a number of benefits. Specifically, if the U.S. followed the EU-15 in terms of work hours, then:

Employed workers would find themselves with seven additional weeks of time off.

The United States would consume some 20 percent less energy.

If a 20 percent energy savings had been directly translated into lower carbon emissions, then the U.S. would have emitted 3 percent less carbon dioxide in 2002 than it did in 1990.5 This level of emissions is only 4 percent above the negotiated target of the Kyoto Protocol.

1 Clearly, the fact that Canada, Iceland, and Finland have land within the Arctic Circle is a contributing factor. Ideally, the climate of the country should be controlled for in this comparison.

2 Energy data is taken from the World Bank, World Development Indicators 2005. Each country’s energy consumption is scaled up proportionate to an increase in average hours that would bring them to the U.S. level of hours. For example, U.S. workers worked 27 percent more hours than those in France, so in this scenario France is assumed to consume 27 percent more energy if it increased work hours to the U.S. level. Summing these levels of energy usage for all the EU-15, the total is 18 percent greater than the actual total energy consumption of the EU-15 in 2003.

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